The United States Treasury Department is resisting General Motors’ push to sell its entire stake in the carmaker.
The U.S. Treasury kept GM afloat with a $50 billion bailout in 2009 and now owns 26.5 percent of the largest U.S. carmaker.
According to the Wall Street Journal, GM executives are frustrated with that ownership and with the nickname “Government Motors”. Executives believe that the U.S.’s shadow affects its reputation and the company’s ability to recruit talent because of pay restrictions imposed by the government. Executives are also unhappy with the continued restrictions on corporate jet use.
This summer, GM came up with a plan with Treasury officials to repurchase 200 million of the 500 million shares the U.S. holds in the automaker, according to inside sources quoted by the Wall Street Journal. Under the plan, the Treasury would sell the remaining shares via a public stock offering.
However, Treasury officials aren’t interested in GM’s offer at the current price and are in no hurry to sell shares, according to people familiar with the matter. The main reason for this is that a sale would leave the government with a big loss on its investment. If it sold all its shares today, the U.S. would lose about $15 billion on the GM bailout.